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Iraqi President Barham Salih with Egyptian Prime Minister Mostafa Madbouly
Iraqi analysts and observers said that this week witnessed a greater "threat" to the Iraqi militias than the threats they were exposed to during months, referring to commercial and legal agreements concluded by Baghdad with Cairo, and news of a Saudi-Iraqi investment agreement.
Last Saturday, Iraq announced the signing of cooperation agreements and protocols in the fields of transportation, water resources, health, environment, justice, investment, housing, construction, investment, industry, trade and finance with Egypt.
The Egyptian Prime Minister, Mostafa Madbouly, praised the mechanism, which he said would work through "Egyptian companies implementing development projects in Iraq, in return for the quantities of oil that Egypt will import from Iraq."
Madbouly emphasized that "establishing this fund will contribute to doubling cooperation and enhancing the implementation of development projects on the land of Mesopotamia."
According to government sources, Iraq wants to establish infrastructure and housing projects financed from oil, instead of hard currency that it does not currently have.
Two government sources, speaking on condition of anonymity, said, "Iraq does not want the exported oil to be counted in these agreements on its share in OPEC, which is part of the demands to reduce it to control the collapse of global oil prices."
The two sources added that "the agreement with Egypt is still in initial stages, but Iraq wants oil prices to be calculated at its general price and at variable rates with the market."
The Iraqi economic expert, Salam Al-Jumaili, said that "if the agreement is achieved with the Iraqi conditions, it will ensure the establishment of large projects without the hard currency exchange needed by Iraq," adding that this method "also contributes to reducing the possibilities and rates of corruption."
The Iraqi militias and their representatives in parliament attacked the Egyptian-Iraqi agreement, criticizing the Baghdad agreement with a "poor country," according to Hassan Salem, a deputy for the Asa'ib Ahl al-Haq movement, who said it would have been more beneficial for the government to agree with China.
And before the Egyptian agreement, he announced Iraqi agreements with Saudi Arabia, signed after the Al-Kazemi government took responsibility in 2020, to raise the level of Saudi investment in Iraq from five million dollars, as it is currently, to tens of billions.
At that time, the Saudi Minister of Investment, Khalid Al-Falih, who chairs the Saudi-Iraqi Coordination Council, expected that the volume of Saudi investments would reach approximately $ 2.6 billion in various Iraqi sectors, especially in the fields of energy, industry, mineral wealth and agriculture.
And one of those big projects is to invest 150,000 dunums of desert lands for agriculture, and most of those lands are located near the Iraqi-Saudi border.
While the signing of the agreements with Egypt witnessed a media campaign led by "second-row media accounts in the militias," according to the description of the Iraqi journalist, Abdullah Badr, the agreement with Saudi Arabia was met with an attack by militia leaders, such as the leaders of the militia Asaib Ahl al-Haq and al-Nujaba and the former Iraqi Prime Minister, Nuri Maliki.
Badr says, "The militia wants one role for Iraq, which is the role of Iran only, and it felt threatened by the government's approach to Saudi Arabia and Egypt this week, as it felt more threatening during all the past months."
The militia campaign compared the Egyptian agreement to a vague deal that the resigned Prime Minister, Adel Abdul Mahdi, was said to have signed with China.
The Iraqi and Egyptian governments have clearly released the details of the agreement, saying that it is a "historic agreement" for relations between the two countries.
Badr says, "The China deal has for a period become a supposed title for the salvation and prosperity of Iraq, and for another period a supposed reason for the fall of Adel Abdul Mahdi, and in any case, the militia was pushing strongly towards it without anyone knowing the details" of the agreements led by Abdul Mahdi.
The Iraqi economic expert, Mahmoud Al-Saffar, said, "The Egyptian agreements are in very early stages," adding that "the real benefit for Iraq cannot be known without understanding the details of those agreements, but the fact that the Egyptian prime minister came to sign them clearly indicates their importance."
Egypt can help Iraq, according to Al-Saffar, in the fields of mining, industry and military fields - the two parties have not announced the signing of military agreements - and also in the areas of maritime transport and ports.
Al-Saffar said that the relationship between Iraq and its trading partners remained unequal, but there is a clear direction to get out of this framework, adding, "The militias seem very concerned about this trend."
Oil for reconstruction .. Will Egypt replace China in Iraq? Is the agreement a drag for normalization?
Al-Kazemi and Madbouly while attending the signing of the agreements (Iraqi News Agency)
It was noteworthy that the Iraqi government headed by Mustafa Al-Kazemi announced the signing of 15 memoranda of understanding with its Egyptian counterpart, which included enhancing understanding, development and exchange of experiences between Baghdad and Cairo in the fields of transportation, water resources, health, environment, justice, investment, housing, reconstruction, industry, trade and finance.
An agreement that sparked a political split inside Iraq regarding the current government ignoring the agreement with China, which was concluded by the previous government headed by Adel Abdul Mahdi in September 2019, which was seen as a lifeline for the Iraqi economy, which suffers from suffocating crises.
The Iraqi-Egyptian rapprochement comes as a continuation of the tripartite summit held last August between Egypt, Jordan and Iraq, which resulted in laying the foundation stone for the "New Sham" project.
The former head of the government follow-up cell in the General Secretariat of the Council of Ministers, Mustafa Sanad, told Al-Jazeera Net that the Iraqi-Egyptian agreement is still in the stage of memoranda of understanding and has not risen to the level of an agreement, considering that its effects are not yet clear.
Sanad believes that the essence of the agreements between countries includes the signing of contracts directly covered with financial funding and liquidity, while the agreement needs parliamentary cover.
Between China and Egypt
During the press conference that brought together Iraqi Prime Minister Mustafa Al-Kazemi and his Egyptian counterpart, Mustafa Madbouly, last Saturday, Madbouly confirmed that there is a tentative agreement between the two countries on the speed of activating the oil-for-reconstruction mechanism, especially since Egyptian companies are ready to implement development projects in Iraq in exchange for the quantities of oil. To be imported by Egypt.
The Egyptian government's position on the agreements signed with Iraq created a series of inquiries regarding the possibility of Egypt replacing China in Iraq's reconstruction projects. Several Iraqi political forces view China as an economic power that enables it to lay down a road map to help Iraq out of its crisis, and Sanad confirms to Al-Jazeera Net that the rapprochement between Baghdad and Cairo is not a substitute for the Chinese agreement, especially since Iraq adopts the principle of economic openness on all axes.
Al-Sudani: Agreements with Egypt are not a substitute for agreements with China (Al-Jazeera Net)
On the other hand, a parliamentary team believes that the Iraqi-Egyptian agreement is not a new approach, but rather a continuation of Iraq's vision of the form of the relationship that should be with Egypt and the strategic importance of the agreement for the two countries, according to Muhammad Shi'a al-Sudani, a member of the committee to monitor the implementation of the government program in the Iraqi parliament.
Al-Sudani assured Al-Jazeera Net that the agreements with Egypt are not a substitute for the agreements with China, considering that Iraq adopts the approach of diversifying economic relations with various countries of the world according to the priority of its national interests, especially that the memoranda of understanding do not need a vote or ratification by Parliament, since its signature falls within the powers of the government. , With an emphasis on the fact that Parliament, with its various political powers, supports the government's orientation towards strengthening the bonds of the relationship between Iraq and its Arab environment.
Nada Shaker: The House of Representatives was surprised by the government’s announcement that the agreement had been signed with Egypt, and that it had ignored the agreement with China (Al-Jazeera)
The Iraqi-Egyptian agreement sparked a split in some representative committees within the House of Representatives on the grounds that Egypt suffers from high debt, unemployment rates and a stifling economic crisis, which puts the Egyptian government's seriousness in implementing this agreement to the test.
A member of the Economy and Investment Committee in the Iraqi Parliament, Nada Shaker Jawdat, said that the House of Representatives was surprised by the government’s announcement that the agreement had been signed with Egypt and that it had ignored the agreement with China.
She confirmed to Al-Jazeera Net that deputies in Parliament submitted a request to the Presidency of the Council of Representatives that includes hosting Prime Minister Mustafa Al-Kazemi and Ali Allawi, his deputy for economic affairs and Minister of Finance, to explain the terms of the Iraqi-Egyptian agreement.
Economic competition, economic
journalist Salam Zidan considered that Egypt sees the Iraqi market as a good space to market its products, especially in light of the current decline in the volume of Egyptian exports to Iraq, which has totaled $ 4.6 billion from 2012 until now.
The current year witnessed a 65% decline in Egyptian exports to Iraq, reaching $ 137.4 million in 2020, while last year it was $ 400.9 million, according to the Egyptian Export Development Authority.
In an interview with Al-Jazeera Net, Zaidan believes that the Egyptian-Iraqi rapprochement is related to Egypt's vision of diversifying its oil imports, obtaining a discount from Iraq that is less than the monthly average for Brent crude by $ 3, in addition to exempting Egyptian goods from customs tariffs, as happened with Jordan.
He added that Iraq has nothing to export to Egypt other than oil, as the Iraqi-Egyptian agreement relies on exporting 12 million barrels per year of Basra Light crude to Egypt and on 6 shipments, each shipment of two million barrels.
Al-Zaidi believes that Iraq’s approach to Egypt came to link the Iraqi economy with the axis of Arab normalization (Al-Jazeera)
Labor import The division of Egyptian labor abroad in the General Union of Chambers of Commerce - which welcomed the economic agreement between Cairo and Baghdad - believes that Iraq represents a suitable environment for Egyptian labor, but revealed that there are about two million workers in different professions who can work abroad, which definitely benefits Egypt to strengthen Sources of her income.
The Central Bank of Egypt announced that remittances from Egyptians working abroad during the fiscal year 2019/2020 increased to $ 27.8 billion, an increase of 10.4% over the previous fiscal year, as it was about $ 25.2 billion.
The Iraqi writer and journalist Mazen Al-Zaidi believes that Iraq suffers from high rates of unemployment, and that it needs projects and agreements to employ its workforce. Egypt is seeking to export workforce, at a time when the agreement with China includes projects capable of employing more than a million Iraqis looking for work.
Al-Zaidi believes in an interview with Al-Jazeera Net that Iraq’s approach to Egypt came with the encouragement and push of a Saudi American in order to link the Iraqi economy with the axis of Arab normalization that Egypt currently represents, as well as making a regional axis led by Israel through the energy portal.
Therefore, the agreement can be considered a continuation of Iraq to the Mediterranean Gas Forum, which includes Egypt on the one hand, and Israel and Greece on the other hand, and thus it is directed against the Turkish and Iranian axes.
Observers believe that despite optimism about the Egyptian-Iraqi-Jordanian rapprochement during that period, Iraq has many political problems at home that could affect the independence of its decision, but Arab solidarity from neighboring countries, Egypt and Jordan may help Baghdad to overcome these crises and restore its Arab and regional role. But it takes endurance and patience without looking at the immediate gains.
Dr. Amin Bakr, a member of the Financial and Economic Committee in the Iraqi Parliament, said: “What is happening in terms of understandings and development of relations between Egypt and Iraq should not be read only from an economic point of view, but must be viewed from the side of strengthening the relationship between the two countries and restoring normal relations between Iraq and Egypt. And even Jordan. "
He added to "Sputnik": "As for the mechanisms of selling oil and the Egyptian-Iraqi agreement on the oil-for-reconstruction mechanism, Iraq has long been a member of the OPEC agreement of oil-producing countries, and in return Egypt is an oil importer, so the agreement depends on the ability of Cairo and Baghdad to convince "OPEC will use the mechanism that the two countries want, meaning whether what will be exported from Iraqi oil will be outside the production quota set for Iraq by the organization or outside its previous capacity and offered in the global markets."
Coordination with OPEC
The member of the parliament explained: “As we know that the OPEC agreement is a timetable, that is, there is no specific time limit for its end, in addition to that the global economic crisis as a result of the outbreak of the Corona pandemic exacerbated the crisis after its impact on global oil markets and the selling and purchasing capabilities, and this matter affected Iraq. Largely due to the conditions he suffers from before the crisis, as the budget relies on 95 percent of oil exports. "
Bakr continued: "The decrease in oil prices and also the reduction of Iraqi production quantities according to the agreement of the exporting countries. This matter affected Iraq so much that it has not yet been able to regularly pay the salaries of employees on time, and for some time Iraq has been trying to persuade OPEC countries to increase its share in the sale of oil." Raw, and I believe that Iraq has the right to increase its production because it was damaged during the previous years as a result of wars, especially against ISIS, which drained a lot of the production and financial capacity of Iraq, so the exporting countries had to take into account the situation and Iraqi capabilities.
Security of the region and Iraq
He stressed that: "If Iraq fails to persuade the producing countries to return to its previous position in oil production, this matter will affect the Iraqi financial, economic and security situation, which in turn affects the security of logic."
He pointed out: "The oil agreement between Egypt and Iraq must be read from the political point of view first before the economic, and if we return to the economy, we find that Egypt has capabilities in the aspect of reconstruction and infrastructure that Iraq can benefit from for reconstruction in exchange for oil."
For his part, Egyptian oil expert Ramadan Abu Al-Ela said: "Egypt has major reconstruction companies, and if the oil-for-reconstruction agreement is implemented with Iraq, this will be a promotion for Egyptian companies, in addition to the Egyptian workers who will go to work in those companies."
He added to "Sputnik" that: "Iraqi oil that will come to Egypt will get its consumption needs from it, and then the rest will be recycled and exported by petroleum products. The last agreement comes to complete the Egyptian-Iraqi pipeline agreement that passes through Jordan."
On the obstacles that could face that agreement, Abu Al-Ela said: “What I fear for this agreement is political pressure, especially since the Iraqi political decision depends on the situation at home, which is disputed by several regional and international parties, whether from Iran or the United States of America, and we must not submit To these pressures and to stand by Baghdad in order to liberate its political decision. "
He added, "This matter requires a lot of economic sacrifices to operate Egyptian companies in Iraq, even if we do not achieve gains at the present time, but there will be major gains in the long term, so just finding jobs for Egyptians there and creating job opportunities is not a small gain."
The oil expert emphasized that: "The timing of signing the agreements at the present time and in light of the current circumstances that Iraq is going through is very appropriate for Egypt. As for Iraq, it needs such cooperation to stand with it in order to get out of these exacerbating crises and the dangerous political and security turn that Baghdad will go through during Next period".
Last Saturday, the Egyptian government announced that it had reached a preliminary consensus with Iraq on establishing the "oil for reconstruction" mechanism.
In a speech delivered during the main session of the joint Egyptian-Iraqi High Committee meetings in Baghdad, Egyptian Prime Minister Mostafa Madbouly praised "what was agreed in principle on the importance of establishing the oil-for-reconstruction mechanism."
Madbouly explained, according to a statement by the Egyptian government, that the mechanism is being implemented through "Egyptian companies implementing development projects in brotherly Iraq, in return for the quantities of oil that Egypt will import from Iraq."
"The establishment of this fund will contribute to doubling cooperation and strengthening the implementation of development projects on the beloved land of Mesopotamia," Madbouly emphasized.
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